What Happens to a Lease Agreement when a Tenant Dies?

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lease agreement“Tomorrow is promised to no one.”  There’s no doubt in the validity of the statement or that death changes most everything. In fact, as a residential landlord, you may encounter some confusion when a tenant dies.  How does the death impact your lease agreement?

First, you should know that NJSA 46:8-9.1 offers some insight concerning termination on death – as it pertains to leased properties. It is critical to determine who signed the lease. Were the premises solely rented to the individual who passed away? Or, are there multiple tenants?

A lease agreement does not necessarily end with the death of the tenant. However, a surviving spouse may request premature termination of a lease agreement upon the passing of the husband or wife.  Meanwhile, there are specific notice requirements. Additionally, the termination does not become effective until the fortieth day following the landlord’s receipt of the written notice.  And, the surviving tenant is expected to continue to pay the rent until he or she vacates.

In the meantime, different scenarios can come into play when it comes to a lease agreement entered into with a now deceased tenant. In fact, the New Jersey Appellate Division just considered a case involving a landlord’s attempt to evict family members when the named tenant died. Although the case is an unpublished decision, it provides some vital information.

Tenant Dies: Does the Lease End?

On June 27, 2018, the New Jersey Appellate Division submitted an opinion in Kwok Fang Chang Trust v. Estate of Malakoff.  The ruling only applies to the named parties and is not precedential law.

According to the facts of the case, Kwok Fang Chang Trust were the owners of an apartment in Edgewater.  More than thirty years ago, Sylvia Malakoff and her husband rented the premises from the plaintiff. After her husband died in 2004, Sylvia was listed as the sole tenant on the lease agreement. That said, Sylvia’s son Jay lived with her through much of her tenancy.  Jay’s son moved in with his grandmother and father approximately ten years ago.

Kwok Fang Chang Trust and Sylvia signed the most recent lease agreement in 2016, with a termination date of April 30, 2017.  Although Sylvia was the only named tenant on the lease agreement, there were special provisions that stated the following:

[Paragraph] 11. Use of Property. The Tenant may use the House only as a private residence for the following persons: Jay Malakoff, her son, and Jay Malakoff’s children or spouse, referred to as “household members” . . . .

[Paragraph] 13. Events of Default. The following are defaults under this Lease: . . . (c) the death of remaining Tenant, Sylvia Malakoff . . . .

After Sylvia’s death in January of 2017, the landlord went to court and filed proceedings to take possession of the premises.  The plaintiff claimed that the death of Sylvia Malakoff meant the lease was in default.

Tenant Fights Back

In March of 2017, the landlord sent Jay Malakoff a letter asking him to quit the premises because of the default under the lease. The expectation was that Jay and his son would leave because Sylvia’s death terminated their right to lawfully inhabit the premises.

Upon review, the court found the language of the lease agreement to be contradictory.  It was true that Sylvia’s death created the default. However, Jay and his son presented evidence showing they were the ones paying the rent and utility bills.

After considering the applicable case law and Anti-Eviction statutes for residential tenants, the court determined that Jay and his son were now month to month tenants. The Appellate Division referred to the two – as “functional tenants.”  Based on the circumstances, they could only be evicted for good cause.

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